Scottish Court of Session Decisions

This was a case, in a great measure, of a special nature. Charles Bremner, W.S. was employed by the late Andrew Bell, engraver and publisher in Edinburgh, as his law-agent and adviser from 1801 till 1809, when Bell died. At this time an account for business was due to Bremner, amounting to £423, of which £110 was outlay. Bell left a trust-settlement of his affairs, under which Bremner was one of the trustees. Bremner was subsequently employed for a considerable number of years as law-agent and factor for the trust-estate, with power to pay debts due by it, and had large intromissions with the trust-funds. A large account was incurred to him for agency, and the trustees frequently and urgently requested him both to make up a state of his intromissions, and also to render his accounts. In consequence of great delay on the part of Bremner, who neither made up a state of his intromissions, nor rendered any of his accounts, even those incurred by the deceased truster, the trustees in 1818 and 1819 appointed another agent and factor. At length, in 1819, after giving very ample warning, the trustees raised an action of count and reckoning against Bremner, concluding for £5000, more or less, and obtained a decree for that sum, from the Lord Ordinary, without the accounts of Bremner having been produced, or the merits of the accounting gone into. After a variety of procedure, including certain extrajudicial arrangements between the parties, and a submission of the whole questions of accounting to Thomas Robertson, accountant, Edinburgh, as arbiter, an interim decree was pronounced by him, fixing the principles of accounting to a great extent, and, in particular, including the question of interest on Bremner's professional accounts, incurred in the employment of the trust, and subsequent to the death of Andrew Bell. The submission expired, however, in 1831, without disposing of the whole questions at issue; and as Bremner had previously raised a suspension of the decree for £5000, which fell asleep during the submission, that process was now wakened.

Bremner had executed a trust-conveyance of his estate to William Scott Moncreiff, accountant, Edinburgh, and he and his trustees, in 1832, raised an action of reduction of the decree for £5000, containing also conclusions of count and reckoning against Bell's trustees, to whom various considerable interim payments had been made by Bremner's trustee, upon the assumption that they were creditors of Bremner to a much larger amount than the truth. And they now alleged that, on a full examination of Bremner's accounts, it would appear that, even during the whole period when he had been delaying to render them, the balance was in his favour. During the proceedings before the arbiter, but only as late as 1829, the accounts of Bremner, including those incurred by the deceased truster, had been made up, and stated in the accounting as against the trustees.

The process of reduction was conjoined with the suspension, and the Lord Ordinary remitted the cause to the same accountant who had been arbiter, to report on the questions of accounting so far as not already fixed by the interim decree-arbitral.

The accountant made an interim report, which, inter alia, embraced the following subjects. It appeared from the books of Bell that a sum of £74 had been paid to Bremner, during his lifetime; and the accountant reported, 1st, That as Bremner's accounts against Bell had not been rendered till 1829, no interest should be allowed to run on them (except for outlays) prior to that date; and, 2d, That as the sum of £74, paid in Bell's lifetime, was an indefinite payment, Bremner the creditor was entitled to apply it exclusively against that part of his account which consisted of professional charges, and which exceeded the sum of £74 at the date when the payment was made: and that Bremner was not bound to apply it in extinction of any outlays. The effect of this mode of application was to wipe off a considerable portion of that part of the account which bore no interest in favour of Bremner, while it left untouched the whole of that part which bore interest, and thus made a material difference on the balance as now existing.

Objections to the report were stated by both parties. Bell's trustees pleaded—1st, That the general rule was fixed that a law-agent's account did not bear interest, except for outlays, until rendered. ¹ But that, even if it were always a question of circumstances whether interest should be

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¹ Granger's trustees, May 15, 1833 (ante, XI. 591); Napier, June 2, 1835 (ante, XIII. 853).

allowed, the circumstances in this case were decisive. The delay to render accounts was solely imputable to the agent himself. He had been repeatedly urged for a series of years to render them; an action had at last been necessary; and it was only after a submission, and as late as 1829, that the accounts were made up and rendered. There was, therefore, no ground for allowing interest, except for outlays, before that date: and although Bremner was factor under the trust, having funds in his hands, and empowered to pay debts, it was impossible to hold that an account due by the deceased which had never been rendered to the trustees, or even made up at all till 1829, should carry interest, merely because Bremner would have been entitled to pay it so soon as made up and rendered. 2d, In regard to the application of the sum of £74, the trustees pleaded, that although, where two distinct debts existed, a creditor might impute an indefinite payment to either of them; yet this was a different case, as there was only one debt due, being the business account. The sum was, therefore, necessarily imputable to it; and should be imputed either wholly against the outlays, as being that part of the account which bore heaviest on the party making the payment, and to which it must be presumed he meant to apply it; or at least so as to cover both outlays and professional charges alike, so far as it went.

Bremner and his trustee answered, (1.) That no general rule had ever been fixed, to the effect of always preventing interest from accruing on the professional charges in a business account, whilst unrendered. The leaning of the Court was to allow interest on the whole account, to run from the date of a twelvemonth after the last item was incurred; ¹ and therefore interest should be allowed to run on the whole account due by the deceased, from the date of a twelvemonth after his death. At least it was a mere question of circumstances, whether interest should be allowed or not; and as Bremner had been factor to the trust, for a long term of years, with funds in his hands, and empowered to pay all debts, the trust-estate should be placed in the same position as if he had paid this account within a twelvemonth after the trustee's death, which would have the effect of allowing him interest on the most equitable footing. (2.) It was fixed that a creditor was entitled to impute an indefinite payment in the manner most advantageous for himself; and Bremner was therefore entitled to apply the £74, in extinction of professional charges exclusively.

The Lord Ordinary “approved of the interim-report” ^* of the accountant.

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¹ Henry, Feb. 13, 1801, Diet. v. Annualrent. App. No. I.; Young, March 3, 1830 (ante, VIII. 624).

^* “ Note.—The only point on which the Lord Ordinary has any doubt, is with respect to Mr Bremner's right to interest on his professional charges for business done in Mr Bell's lifetime, prior to rendering his accounts. The business was done prior to Mr Bell's death, which happened 10th June, 1809, but the accounts were not rendered till 1829. The Accountant allows interest after this, and till payment, but not before; and the Lord Ordinary has confirmed this opinion, though not without hesitation. The rule does not seem to be fixed on any general principle, and each case appears to have gone on its special circumstances. But it is not easy to see why interest should be allowed as a matter of right, not on advances, but on professional charges, before the employer is ever asked for payment of the principal; and there are no circumstances here which require the application of such a principle.”

Both parties reclaimed.